Pence Video Replay

Photos: Pence on Stage at CEO Council

Photos by Paul Morse for The Wall Street Journal

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Summers Skeptical of Big Benefits from Corporate Rate Cuts

Sharon Nunn

If the U.S. cuts its corporate rate, it could spur a “race to the bottom,” with countries world-wide cutting rates to remain competitive, Harvard economist and former Treasury secretary Larry Summers said at The Wall Street Journal’s CEO Council meeting in Washington.

“Should the objective of U.S. policy be a race to the bottom where all countries race to cut their tax rates and eventually there’s no taxation of mobile capital and all taxes are paid for by workers?” Mr. Summers said.

Republicans' plan to overhaul the U.S. tax code includes a deep cut in business-tax rates. They say the cuts will ramp up economic growth and make the U.S. more competitive with lower rates currently seen in European countries that have already trended down in recent years.

But economists and analysts have differed over just how much growth a deep cut could produce. Some have argued the tax cut would unleash 3% annual growth, but Mr. Summers is predicting just 2% growth in the coming years.

“It could turn out that growth accelerated… but it’d be a crazy prediction,” Mr. Summer said. “There’s nothing in the experience of past tax cuts, nor is there anything in the experience of a large number of [economic] modeling exercises.”

Hassett Highlights

Kevin Hassett, the Chairman of the White House Council of Economic Advisers, is sitting down with Global Economics Editor Jon Hilsenrath. Here are some reactions:

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Is Trump Committed to Globalization?

CEOs take another quiz:

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Quick Highlights From DeVos Interview

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Betsy DeVos Is Up Next

As the education secretary takes the stage, CEOs voted in another snap poll.

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Takeaways From Wilbur Ross Interview

Jacob Schlesinger

I'll have a story soon. in the meantime, here are the top lines:

-- Wilbur Ross: Nafta's end would be "devastating" to Mexico
-- Nafta collapse would be "far more damaging" to Canada and Mexico than to U.S.
-- Ross assumes Canada and Mexico "will come to their senses and make sensible deal" on Nafta
-- Ross: Hopes new Nafta will provide "standardized language" for new trade deals
-- Ross: Nafta formula could expedite negotiations of future bilateral trade deals
-- Ross suggests U.S. rejoining Trans-Pacific Partnership is not on the table
-- Ross declines to discuss Trump's upcoming "major" trade announcement

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Highlights From Wilbur Ross interview

We'll have a story later, but for now, here are highlights from WSJ Editorial Page Editor Paul Gigot's interview of Secretary of Commerce Wilbur Ross.

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Bringing Working Class Workers Back to Corporate America

Bringing janitors, drivers, and doormen back into ranks of a company's workforce could help spur growth among white, middle-aged workers who lack college degrees or technical skills, Nobel prize winning economist Angus Deaton told CEOs.

Though such jobs typically aren't considered to be part of a firm's key mission, those workers used to be employed by and "belong" to the firm, Mr. Deaton said, and talented people sometimes had the chance to move up. Not so now, as more of those positions were outsourced, limiting opportunities for promotion, he said.

Mr. Deaton and Anne Case, a fellow Princeton economist who was also featured on stage, have studied an uptick in mortality rates among white, middle-aged Americans who have low levels of education.

The "deaths of despair", which started in 1999, are the result of a buildup of social dysfunction that could be pinned to poor job prospects, they say.

Ms. Deaton singled out non-compete clauses for hindering workforce mobility and depressing wages for workers. He also said in an email Tuesday that "our grotesquely expensive healthcare system" is cutting into workers’ wages.

"CEOs could help [by] pressing for health reform that gets healthcare out of firms, schemes like Medicare for all, or one of the many schemes that works in Europe or Canada," he said.